Question to the Department for Work and Pensions:

To ask the Secretary of State for Work and Pensions, what steps he is taking to clarify the fiduciary duties of pension fund trustees to support a longer term approach to investing pension funds.

We want pension schemes to take account of all financially material long-term risks when making investment decisions. We are concerned that sometimes shorter-term considerations may be disproportionately influential. This can exclude or reduce consideration of investment options that take account of longer term financial factors, such as those arising from material environmental, social and governance (ESG) risks.

The 2017 Law Commission report ‘Pension funds and social investment’ proposed some legislative changes to clarify the fiduciary duties of trustees in this respect, which we are minded to accept. We plan to launch a consultation on regulatory changes and respond in full to the report by June 2018.